problems installing xp

i have just bought an OEM version of windows xp, the disk has "for use with a new pc" writen on it. The problem i have is that im having trouble installing, i've tried formatting my HD which had 98se on but when i try to install xp ie E:/SETUP the computer tells me that this program cannot run from dos. I have also tried setting my cdrom as the 1st and only boot up device, but then im told that its not a valid system disk.Can anyone help me because its driving me mad.

appologies if i cannot reply to anyone as im about to go to work and wont be home until 6pm tonight. Thanks in advance.

Forget using a floppy. Go into BIOS by re-booting and tapping the DEL key. Set your CD drive as first bootable device, exit BIOS saving the settings.

Place your CD in the drive and re-boot. XP will install the required files for installation, just follow the insructions on screen. At the first stage of installing, you will be asked to "Press any Key to continue" do so! but you will then be asked the same question twice again as your PC re-boots. [Ignore these, or you will find yourself in a loop] After approx. 10 seconds XP will continue to setup from the hard drive. Good luck. j.